GIIRS Emerging Market Assessment Resource Guide What s in this Guide? I. Definition: Energy Use and Energy Sources II. Why Monitor and Record Energy Use? III. How to Monitor and Record Energy Use IV. Utilizing Renewable Energy Sources V. Additional resources I. Definition: Energy Use and Energy Sources A company s energy use, usually measured in megajoules (MJ) or kilowatt hours (kwh), includes energy from fuels used (gas, oil, petrol, biomass, etc.) and electricity consumption. 1 Energy can be renewable or non-renewable. Non-renewable energy refers to energy from sources that cannot be replenished in a short period of time: those are fossil fuels, which primarily consist of oil, coal, and natural gas. Renewable energy is a general term used to describe energy derived from sources that can be infinitely replenished. Renewable energy sources include solar, wind, geothermal, small-scale hydro (less than 5 MW), and qualified fuel-based biomass energy. Some common sources of electricity: Power grid: a system of synchronized power providers and consumers connected by transmission and distribution lines and operated by one or more control centers. 2 Diesel generator: a combination of a diesel engine with an electrical generator (alternator) to generate electrical energy. Diesel generators are used in places without connection to the power grid, as emergency power-supply if the grid fails 3. Biofuel and other clean/renewable based generators: biofuel and biopower refer to the use of biomass energy that is, energy derived from living organisms or their by-products to generate fuel and electricity, respectively. The most common types of biofuels are biodiesel and bioethanol. 1 UNIDO SME Indicator Primer (2010), section 3.1 http://www.unido.org/fileadmin/user_media/services/environmental_management/cleaner_production/ SME_Indicator_Primer.pdf 2 US Nuclear Regulatory Commission, http://www.nrc.gov/reading-rm/basic-ref/glossary/electric-power-grid.html 3 http://en.wikipedia.org/wiki/diesel_generator Page 1 of 6
II. Why Monitor and Record Energy Use? Energy monitoring is the regular collection of information on energy use. Through monitoring and recording, a company can keep track of trends in its energy consumption, and identify drivers in energy use. Monitoring is also essential to setting reduction targets in energy use. Energy monitoring and targeting (M&T) is a management tool that can help a company achieve energy savings as well as reduce its environmental impact. Monitoring energy use is an integral part of an Energy Management System (EMS). (For more information on implementing an EMS, please refer to GIIRS EM Resource Guide: Environmental Management System. ) Some benefits of monitoring and recording energy usage: Explain variations in energy use, such as increased production or seasonality factors Determine future energy use Determine overall energy productivity Identify performance issues in equipment, such as inefficient HVAC (heating, ventilation, and air conditioning) equipment Identify potential wasted energy, such as unnecessary use of equipment Identify opportunities for energy savings and set reduction targets Companies that set and meet energy reduction targets are often able to: 4 Save money by reducing energy costs Increase energy productivity (i.e. achieve the same output at a reduced level of energy consumption) Reduce exposure to rising energy prices Reduce emissions of carbon dioxide and other greenhouse gases III. How to Monitor and Record Energy Use Step 1: Basic Monitoring The most immediate way to monitor energy use is keeping track and recording: All utility bills Receipts for energy consumed outside of public utilities (e.g. purchase of fuel in bulk) 4 Marco Matteini, Why ISO 50001 and Energy Management for Developing Countries and Emerging Economies Industry, http://www.iso.org/sites/iso50001launch/assets/docs/04-marco_matteini-why_iso_50001_dev_countries.pdf Page 2 of 6
Step 2: Calculating Energy Use 5 1. Make a spreadsheet or use an available spreadsheet. Label the spreadsheet columns, for example: A (energy types), B (quantity), C (units), D (conversion factors), E (energy in kwh or MJ). 2. List all types of energy that the company use in column A. 3. Collect usage data for each of the energy types in column A. Make sure that the data are applicable to the reporting period. Enter the quantities of energy in column B. 4. Indicate in column C the units referring to the quantities provided in column B. 5. Convert each of energy inputs into a common unit of measurement (kwh or MJ). Enter appropriate conversion factors into column D. Multiply the value in Unavailable or unreliable electric bills? This can be the case for tenants of leased spaces (particularly office buildings) where electricity costs are included in the rental payments or when information from electricity providers is unreliable. There are two potential solutions: 1. Estimate electricity consumption. For more details on estimating electricity costs, please refer to the GHG emissions from purchased electricity guide under http://www.ghgprotocol.org/calcula tion-tools/all-tools 2. Install metering devices to monitor electricity use. column B by the conversion factor in D for each material and enter the results in column E. 6. Sum all the totals to get the company s total energy consumption 6. Sample Energy Use Calculation Table Energy Types Quantity Units Conversion Factors Energy in kwh or MJ Total Note: Various energy sources are typically calculated in different units (natural gas in cubic meters or BTU, fuel oil in liters or tons, coal in tons), and these have to be converted. Use www.unitconversion.info/energy.html for energy unit conversion. 5 UNIDO SME Indicator Primer 6 For more tools, visit New Ventures to learn more about their Toolkits for Impact Measurement (TIMe): http://www.new-ventures.org/content/creating-metrics-environmental-impact Page 3 of 6
More advanced monitoring For more advanced monitoring, a company can use metering devices, which provide more detailed information on energy use over short time periods. Further, by implementing submetering at key usage points, a company can identify energy consumptions more granularly and increase efficiency. IV. Utilizing Renewable Energy Sources 7 Common types of renewable energy include: Solar: Energy generated from the sun. Solar panels, solar thermal heaters, passive solar heating and cooling are just a few of the many technologies and techniques available to capture the energy of the sun. Wind: Energy generated from wind currents. Wind turbines are the primary method by which energy is captured from the wind. Biomass: Essentially any organic matter can be considered biomass. Some of the more common types of biomass are corn, saw grass, and sugarcane which are used for creating various types of ethanol. There are also forms of biomass such as wood pellets, municipal waste, and animal waste that can be used for generating electricity. Hydrogen: Hydrogen has the potential to be a great energy source. However, due to issues with storage, it has not established a very large presence in the energy generation space. Fuel cells are the most common way in which hydrogen is used to create energy. Essentially, an electrochemical reaction is induced to combine hydrogen and oxygen, which in turn creates an electric current, heat, and water. 8 Geothermal: The temperature of the earth just below the surface stays at a relatively constant temperature of 50-60 F (10-16 C). Geothermal energy technology uses this constant heat source to either provide direct heating or cooling to residential or commercial buildings or generate electricity by creating steam and running a turbine. Ocean: The various forms of ocean energy technologies attempt to capture the energy generated by different movements of water, including waves, currents, and tides. Hydropower: Hydropower uses the flow of water to drive turbines that create electricity. 7 Guide to Purchasing Green Power, http://www.epa.gov/greenpower/documents/purchasing_guide_for_web.pdf 8 http://www.nrel.gov/learning/re_basics.html Page 4 of 6
Since investing in renewable energy can lead to relatively high upfront costs, it is important to first know the company s energy usage and needs and analyze the potential for renewable energy. Depending on the country or province/state where the company is located, there may be market incentives, tax measures, and/or financing mechanisms to implementing renewable energy, which would reduce upfront fixed costs. Some benefits of integrating renewable energy sources: Environmental: reduce the company s negative environmental impacts Financial: protect against electricity price volatility, fuel supply disruption and future environmental regulations Stakeholders: meet organizational environmental objectives (e.g. environmental management system), generate positive publicity and improve employee morale Case Studies: (From UNDO SME Indicator Primer) GIIRS Pioneer Company Pwani Oil Products Ltd., a manufacturer of edible oils and fats and laundry soaps in ⁰enya, achieved a 5K reduction in energy use by simple low-cost and no-cost measures. These included the installation of energy-saving lamps, installation of timers, replacement of old air compressors and other equipment, fixing of leaks and other maintenance measures. HACO industries, a producer of stationery products, shavers, personal-care and householdhygiene items in ⁰ enya, decreased its energy use by more than 10K by installing internal meters to monitor the consumption trends in different user zones, increasing the awareness of staff by putting up% switch off the lights stickers and replacing light bulbs. UNI UE S.A., a cosmetics producer in Peru, targeted energy consumption by improving boiler efficiency, recovering heat from the chimney flue gases, insulating the water tanks, decreasing the heat losses in the steam distribution line, reducing electricity consumption by regulating and maintaining the compressors, taking advantage of natural light and switching to more efficient light bulbs. They also reduced their electricity bill by changing the peaks of the company s usage to hours outside of the peak period of electricity demand. There are two main ways in which a company can purchase renewable energy for its energy needs: through a power supplier (that is, through the power grid), or on-site (that is, off-grid). Page 5 of 6
1. Through a power supplier: Local electrical utilities providers sometimes have a renewable energy purchase plan. Such a plan helps utilities fund renewable energy projects by charging customers (those who voluntarily opt-in) a premium for electricity. 2. Buy the technology directly and have it available on-site: Solar/photovoltaic (PV) panels, wind turbines, fuel cells, and biomass combustion may all be available and adaptable for a company s purposes. Generally, on-site renewable generation gives the ability to operate independently from the power grid, or at least to provide backup when power from the grid is interrupted. Before purchasing renewable energy technology for on-site production, it is important to (a) do a thorough analysis of the business s energy usage, (b) site potential for renewable energy and (c) understand the company s financial position. V. Additional Resources For additional information on Resource Efficient and Cleaner Production (RECP) methods, refer to Enterprise-Level Indicators for Resource Productivity and Pollution Intensity: A Primer for Small and Medium-Sized Enterprises, produced by the United Nations Industrial Development Organization (UNIDO) and the United Nations Environment Programme (UNEP) http://www.unido.org/fileadmin/user_media/services/environmental_management/cleaner_pro duction/sme_indicator_primer.pdf For implementation of energy efficiency for industrial companies in Asia, the UNEP Energy Efficiency Guide for Industry in Asia can be useful: http://www.energyefficiencyasia.org/ The RETScreen Clean Energy Project Analysis Software is a unique decision support tool. The software, provided free-of-charge, can be used worldwide to evaluate the energy production and savings, costs, emission reductions, financial viability, and risk for various types of renewable energy and energy efficiency technologies. http://www.retscreen.net/ang/identification.php UNIDO and Renewable Energy: Greening the Industrial Agenda: http://www.unido.org/fileadmin/user_media/services/energy_and_climate_change/renewable_e nergy/publications/08-58817_ebook_small.pdf ClimateTechWiki (http://climatetechwiki.org/) offers a platform for a wide range of stakeholders in developed and developing countries who are involved in technology transfer and the wider context of low emission and low vulnerability development. The Guide to Purchasing Green Power, though written for the US market, has valuable insights: http://www.epa.gov/greenpower/documents/purchasing_guide_for_web.pdf Page 6 of 6